Gujarat High Court Judgments — 2023

The High Court held that the compensation awarded by the Tribunal requires enhancement under the heads of future economic loss and medical expenses. Regarding future economic loss, the Tribunal erred by not considering prospective income, which is a crucial aspect of just compensation as per the principles laid down in National Insurance Company Limited vs. Pranay Sethi and Ors. The Court modified the award by calculating future economic loss based on a monthly income of Rs. 3,000/- plus a prospective addition of Rs. 1,200/-, considering the 15% disablement, resulting in an enhanced amount of Rs. 32,400/- under this head. For medical expenses, the Tribunal's award of Rs. 15,000/- was deemed meager given the actual bills submitted. The Court enhanced the medical expenses to Rs. 1,57,000/-. The compensation under other heads remained unaltered. The total enhanced amount payable to the appellant is Rs. 1,89,400/-, carrying interest at 6%.

The High Court modified the award. It determined the gross monthly income of the deceased to be Rs. 4,377/-. Deductions were made for food allowance (Rs. 250/-), Diwali festival allowance (Rs. 150/-), and professional tax (Rs. 20/-), resulting in a monthly income of Rs. 3,957/-. Applying the principle of adding 50% for future prospects (as the deceased was under 40), an additional Rs. 1,978/- was added, making the monthly income Rs. 5,935/-. After deducting 1/3 for personal expenses, the loss of dependency was calculated at Rs. 3,957/- per month or Rs. 47,484/- annually. Using a multiplier of 17 (as per Sarla Verma case), the total loss of dependency was Rs. 8,07,228/-. The court also awarded Rs. 40,000/- each for loss of spousal, parental, and filial consortium to the wife, son, and mother, respectively, totaling Rs. 1,20,000/-. The total compensation was thus determined to be Rs. 9,57,228/- with 6% interest. The original award of Rs. 14,08,500/- was reduced.

The High Court dismissed the petition. The Court found that the petitioner had a history of engaging in activities that threatened public peace and tranquility. Specifically, the Court noted that SADHAKS at the petitioner's instance had threatened the Investigating Officer, and FIRs were registered against individuals connected to the petitioner for assaults. The Court also highlighted that witnesses were threatened during the trial, and the petitioner had displayed a lack of discipline inside jail, instigating protests. Furthermore, the Court found that the petitioner had produced a fake medical certificate on record in a previous proceeding, demonstrating a contemptuous conduct and abuse of the court's process. Given these aggravating incidents and the petitioner's conduct, the Court held that the order of the State Authority refusing furlough was not erroneous. The Court reiterated the principles that kindness to convicts should not result in cruelty to society and that releasing individuals involved in such offenses on furlough carries a risk of them indulging in similar activities, jeopardizing societal safety and the objectives of punishment.

The High Court held that the notional income of the deceased minor child should be considered as Rs. 30,000/- per annum, applying the multiplier of 15 as per the principles laid down in Sarla Verma Vs. Delhi Transport Corporation & Anr. (2009) 6 SCC 121 and Kishan Gopal & Anr. v. Lala & Ors. (2014) 1 SCC 244. The Court further held that Rs. 50,000/- should be awarded under conventional heads for loss of love and affection, funeral expenses, and last rites, consistent with the cited Supreme Court judgments. Consequently, the total compensation payable was determined to be Rs. 5,00,000/-. The Tribunal's award of Rs. 2,55,000/- was found to be inadequate. The enhanced amount of Rs. 2,45,000/- was awarded with interest at 7.5% per annum from the date of filing the claim petition. Directions were given for the insurance company to deposit the amount within eight weeks, with 50% to be disbursed to the claimants after verification and 50% to be invested in a fixed deposit for three years. The Court also clarified that no TDS deduction should be made on compensation awarded under the Motor Vehicles Act, 1988, referencing a Division Bench judgment of the same High Court.

The Court dismissed the petitions. It held that the petitioners were appointed on an ad-hoc basis for a temporary period of five years, with a clear understanding that unsatisfactory service would lead to termination and ineligibility for regular appointment. Upon satisfactory completion of the ad-hoc period, they were appointed to regular ASI posts. The Court noted that the petitioners had not challenged their original ad-hoc appointment orders, their regular appointment orders, or the Police Sub Inspector (Unarmed), Class III, (Departmental Examination) Rules, 2019, which were framed after their ad-hoc appointments. The Court found that the respondents' rejection of applications from those who completed five years of service as ad-hoc ASIs was correct, as the requirement for five years of service implicitly referred to regular service. The petitioners, not having completed five years of regular service as ASIs, were therefore ineligible. The Court concluded that the ad-hoc period could not be counted for the purpose of promotion eligibility, as the statutory rules and the nature of ad-hoc appointments did not permit it. The interim relief allowing participation in the examination was vacated, and the rule was discharged.

The Court dismissed the petitions. It held that the petitioners were appointed on an ad-hoc basis for a temporary period of five years, with a clear understanding that unsatisfactory service would lead to termination and ineligibility for regular appointment. Upon satisfactory completion of the ad-hoc period, they were appointed to regular ASI posts. The Court noted that the petitioners had not challenged their original ad-hoc appointment orders, their regular appointment orders, or the Police Sub Inspector (Unarmed), Class III, (Departmental Examination) Rules, 2019, which were framed after their ad-hoc appointments. The Court found that the respondents' rejection of applications from those who completed five years of service as ad-hoc ASIs was correct, as the requirement for five years of service implicitly referred to regular service. The petitioners, not having completed five years of regular service as ASIs, were therefore ineligible. The Court concluded that the ad-hoc period could not be counted for the purpose of promotion eligibility, as the statutory rules and the nature of ad-hoc appointments did not permit it. The interim relief allowing participation in the examination was vacated, and the rule was discharged.

The High Court held that the impugned order passed by the SSRD was liable to be quashed and set aside for lack of recording reasons. The Court noted that it is a settled legal position that judicial or quasi-judicial authorities must record reasons in support of their orders, even if it is an order of affirmation. This requirement is essential for clarity, to ensure the authority has applied its mind, and to minimize arbitrariness, thereby upholding the rule of law. While acknowledging that an appellate or revisional authority affirming an order need not give elaborate reasons if it agrees with the original authority's reasoning, the Court emphasized that brief reasons are still necessary. The Court cited several Supreme Court judgments, including *Siemens Engineering and Manufacturing Company India Ltd. Vs. Union of India*, *S.N. Mukherjee's* case, *State of Madras vs. Srinivasan*, *Union of India And Others Vs. Jai Prakash Singh And Another*, and *Uttar Pradesh Avas Evam Vikas Parishad Vs. Sheo Narain Kushwaha And Others*, to support the principle that failure to give reasons amounts to a denial of justice. Consequently, the SSRD's order was quashed and set aside, and the matter was remanded back to the SSRD to pass a fresh de novo order after recording reasons, without entering into the merits of the case. The exercise was to be completed within 12 weeks.

The High Court noted that the primary aspect to consider was whether interim relief was necessary at that stage, given that reassessment proceedings for AY 2015-16, 2016-17, and 2017-18 were continuing pursuant to the notices issued under Section 148 of the Act, in light of the judgment in Union of India v. Ashish Aggarwal. At this juncture, the learned advocate for the petitioners sought permission to withdraw the petitions. The Court granted the permission as prayed for, keeping all contentions open for the petitioners. Consequently, the petitions were disposed of as withdrawn, and the prayer for interim relief stood vacated forthwith. The Court did not decide on the merits of the issues raised regarding the validity of the notices or the definition of 'asset'.

The High Court considered the arguments from both sides regarding the necessity of granting interim relief while reassessment proceedings for AY 2015-16, 2016-17, and 2017-18 were ongoing, pursuant to the notices issued under Section 148 of the Act, in light of the decision in Union of India versus Ashish Aggarwal. At this juncture, the learned advocate for the petitioners sought permission to withdraw the petitions. The Court granted the permission as prayed for, keeping all contentions open for the petitioners. Consequently, the petitions were disposed of as withdrawn, and the prayer for interim relief stood vacated forthwith.

The High Court considered the arguments from both sides regarding the necessity of granting interim relief while reassessment proceedings for AY 2015-16, 2016-17, and 2017-18 were ongoing, pursuant to the notices issued under Section 148 of the Act, in light of the decision in Union of India versus Ashish Aggarwal. At this juncture, the learned advocate for the petitioners sought permission to withdraw the petitions. The Court granted the permission as prayed for, keeping all contentions open for the petitioners. Consequently, the petitions were disposed of as withdrawn, and the prayer for interim relief stood vacated forthwith.

The High Court allowed the petition, quashing and setting aside the impugned notice dated July 27, 2022, issued under Section 148 of the Income Tax Act. The Court applied the reasoning from its previous decision in Keenara Industries Private Limited Vs. The Income Tax Officer, Surat and allied matters, which had allowed pleas regarding limitation and quashed notices for AY 2013-14 and AY 2014-15. The Court found no need to elaborate on the reasoning, directly applying the precedent. The rule was made absolute to this extent. No specific issue was left undecided; the entire challenge to the Section 148 notice was decided.

The High Court allowed the petition, quashing and setting aside the notice dated 20.07.2022 issued under Section 148 of the Income Tax Act, 1961, along with the order under Section 148A(d) of the same date. The Court applied the reasoning from its previous decision in Keenara Industries Private Limited Vs. The Income Tax Officer, Surat and allied matters, which had allowed the plea of the petitioner on the issue of limitation and quashed similar notices for AY 2013-14 and AY 2014-15. The operative direction was to make the rule absolute to the extent of quashing the impugned notice and order. No specific amount in dispute was mentioned, nor were any issues left undecided.

The High Court of Gujarat allowed the petitions. The primary ground for allowing the petitions was the issue of limitation. The Court found that the notices issued under Section 148 of the Income Tax Act, 1961, and the impugned orders passed under Section 148A(d) of the Act were indeed barred by limitation. Consequently, the Court quashed and set aside these notices and orders. The reasoning for this decision is that the authorities failed to comply with the statutory time limits prescribed for issuing such notices and passing orders. The ratio decidendi is that any action taken by the tax authorities beyond the period of limitation is invalid and liable to be set aside. The operative direction was to quash and set aside the notices and orders, and accordingly, all the petitions were disposed of.

The High Court of Gujarat allowed the petitions. The Court quashed and set aside the notices issued under Section 148 of the Income Tax Act and the impugned orders passed under Section 148A(d) of the Act. The primary ground for this decision was the issue of limitation. The Court found that these notices and orders were issued beyond the permissible period of limitation as prescribed by the statute. Consequently, the reassessment proceedings initiated were deemed invalid. The operative direction was to quash and set aside the impugned notices and orders, thereby disposing of all the petitions accordingly. No issue was expressly left undecided.

The High Court allowed the petition, quashing and setting aside the impugned penalty order dated 30.11.2022. The Court found a serious flaw in affording the opportunity of hearing to the parties, which resulted in the imposition of a substantial penalty. Specifically, the notice issued under Section 274 read with Section 271(1)(c) of the Act on 28.11.2022, requiring the petitioner to appear on 29.11.2022, provided less than 24 hours. The Court termed this as a 'pure and simple breach of principles of natural justice'. The Court noted that a request for adjournment was made but was not heeded. The operative direction was to grant an opportunity of hearing from the stage where it was left, with communication to be made within four weeks and proceedings to be completed within eight weeks thereafter. The Court did not enter into the merits of the penalty itself.

The High Court held that the petitioner is entitled to the refund along with statutory interest under Section 244A. The Court noted that the revenue's appeal was dismissed in August 2016, making the refund due thereafter. The respondent's reasons for delay, such as separate IT portals and manual deposits, were not considered sufficient to justify the five-year delay post the High Court's decision. The Court referred to its decision in Nima Specific Family Trust v/s Assistant Commissioner of Income-tax, holding that while interest on delayed refunds is mandated, interest on interest is not permissible. However, considering the exceptional delay and the respondent's lack of clarity on outstanding demands, the Court directed the respondent to complete the refund process within three months. If not completed within this period, the respondent was ordered to pay Rs. 1 lac to the petitioner as compensation. The petitioner was also directed to submit necessary documents regarding name change within one week.

The High Court noted the procedural difficulties faced by the petitioner in obtaining the refund of Rs.50 lacs, which was paid under protest and for which the appellate authorities had ruled in its favour. The Court referred to the Bombay High Court's decision in Vodafone Idea Ltd. V/s Commissioner of Income Tax, which held that technical difficulties in the system should not override the correct legal position, and directed manual processing of refunds if necessary. In the present case, the revenue's counsel volunteered that the refund process would be completed within three months, subject to the petitioner completing necessary procedural formalities, including submitting supporting documents for the name change. The Court directed the petitioner to submit physical and e-copies of relevant documents to the ACIT, Income Tax, Vadodara, within one week. If the process is not completed within three months, a compensation of Rs.1 lac would be payable. The petition was disposed of on these terms.